Total machine-hours: 32,700
Total fixed manufacturing overhead cost: $294,300
Variable manufacturing overhead per machine-hour: $2
Recently, Job T687 was completed with the following characteristics:
Number of units in the job: 10
Total machine-hours: 20
Direct materials: $545
The correct answer and explanation is :
To calculate the total manufacturing cost for Job T687, we need to consider both the fixed and variable manufacturing overhead costs, along with the direct material costs.
Step-by-step Breakdown:
- Direct Material Costs:
The direct material cost for the job is provided as $545. - Direct Labor Costs:
This value is not given in the problem, so we won’t be able to include it in the total cost calculation. - Variable Manufacturing Overhead:
The variable manufacturing overhead cost per machine-hour is given as $2. The job used 20 machine-hours. [
\text{Variable Manufacturing Overhead} = 2 \times 20 = 40 \text{ dollars}
] - Fixed Manufacturing Overhead:
The total fixed manufacturing overhead is $294,300, but it is allocated to all jobs based on machine-hours. We need to determine how much of this fixed overhead is allocated to Job T687. The total machine-hours are 32,700. So, the fixed overhead allocation rate per machine-hour is: [
\text{Fixed Manufacturing Overhead Allocation Rate} = \frac{\text{Total Fixed Manufacturing Overhead}}{\text{Total Machine-hours}} = \frac{294,300}{32,700} = 9 \text{ dollars per machine-hour}
] The job used 20 machine-hours, so the fixed overhead allocated to Job T687 is: [
\text{Fixed Manufacturing Overhead} = 9 \times 20 = 180 \text{ dollars}
] - Total Manufacturing Cost for Job T687:
Finally, the total manufacturing cost for Job T687 is the sum of the direct materials, direct labor (if provided), variable manufacturing overhead, and fixed manufacturing overhead: [
\text{Total Manufacturing Cost} = \text{Direct Materials} + \text{Variable Manufacturing Overhead} + \text{Fixed Manufacturing Overhead}
] Substituting the known values: [
\text{Total Manufacturing Cost} = 545 + 40 + 180 = 765 \text{ dollars}
]
Thus, the total manufacturing cost for Job T687 is $765.
Summary:
The total manufacturing cost for Job T687 is comprised of:
- Direct Materials: $545
- Variable Manufacturing Overhead: $40
- Fixed Manufacturing Overhead: $180
The total is $765.
Here is the breakdown of the total manufacturing cost for Job T687. The chart shows the contributions of direct materials, variable manufacturing overhead, and fixed manufacturing overhead to the overall cost, which totals $765.